tv On the Money With Maria Bartiromo NBC April 1, 2013 12:30am-1:00am PDT
>> we are concerned about, you know, when we starting to hear about reductions in tsa agents. that would certainly have an impact. reductions in customs agents, that would have a big impact. anything that makes the lines longer for our customers, we certainly don't want to see. >> elsewhere t-mobile is changing its business model. the wireless phone company says it will stop subsidizing cell phones, and that customers will either have to buy cell phones at full price, pay in installments, or bring their own phone. typically phone companies offer subsidized phones at a substantial discount when a customer signs that two-year contract. so the markets are watching a tiny island in the mediterranean. but investors are still hoping for big returns here in the united states. which is likely to win out here? joining me right now, joe lavorgna, chief u.s. economist at deutsche bank, and nathan bachrach, the financial group ceo. gentlemen, welcome. thank you for joining us here "on the money." what do you think?
nathan, we see the markets reaching or touching new highs almost on a daily basis during this first quarter. how much room do you think there is to run to the upside still? >> well, there is some room to the upside. it's all going to be independent on the retail investor and whether or not the $900 billion, bill, is still sitting in checking and savings accounts. if that starts to move, that could be the power that could really drive the market further, as long as we don't have disturbances in the force that would be europe. >> exactly. and joe, here in this country, housing seems to be a primary driver of our recovery, even though the data are mixed. let's take a listen to what david blitzer of standard & poor's had to say about that. >> overall we're about 9% above the lows for 20 city composite. we beat the consensus forecast, which was a touch under 8%. we're at 8.1% over the last 12 months. so across all 20 cities, and really, across housing, given a lot of the other economic data, we seem to be cranking on all cylinders.
>> do you agree? is housing cranking on all cylinders right now? >> yes, bill. in fact, i would actually look at the core logic home price data. a little more timely than the s&p data. it actually shows more price appreciation. core logic also told us this week that home inventories are down in absolute terms almost 20% from a year ago. so i think, yes, housing is definitely firing on all cylinders. total economy-wide spending is worth about 20% of gdp. on average it's only been 17%. so the housing sector really can provide us with a tremendous lift this year and next and keep us largely immune i think from what is happening overseas. >> so we know what is right, right now, nathan. what could get in the way of the market? it's largely been ignoring the latest european issues, the banking crisis in cyprus. are there roadblocks that people are not thinking about right now? >> well, thing is a couple of roadblocks. one thing that is not being talked about at all is that china has to figure out how to support their middle class.
when you've got 85 billionaires inside of your governing body, that probably tells you that wealth distribution isn't going along too well. they don't get the middle class there, i think you're going to have some real challenges in china. in europe, they're working off of a philosophy. i'll call it amend, pretend, extend. they're pushing everything out, trying to ignore everything. on the one hand, a retailer investor might say gee, i'm really concerned. on the other hand, we've seen this book before. we've got the videotape. we've got the t-shirt. and in 2008, 2009, i think europe is going to continue to do whatever europe needs to do in order to keep their corporations making money and their economy stumbling forward. >> joe, how do you think cyprus ends? and how much attention should we be paying to it, do you think? >> it certainly is worth paying attention to as perhaps it causes investor confidence to get further shaken. so it definitely is a risk longer term, especially if there are other more important or larger economies, rather, that have further disturbances.
but if we look back at the u.s. market and see how the stock market is performing, importantly, bill, see how credit spreads are performing, and also the economic data being better than average, it does look like -- i shudder as i say this word. it does look like the u.s. is decoupling from europe. as long as the ecb is effectively the back stop they've been, i think europe can continue to muddle along, eventually come out of its recession. but the u.s. will remain relatively immune because a lot of the growth in the u.s. we expect to be domestic-driven. >> nathan, we're heading into the second quarter after a stellar first quarter for the markets. what are you telling your clients to invest in right now? >> i like large cap growth. when i took a look at con edison, which gives you electricity to power your set, and they're selling at 16 times earnings, and i take a look over at some very large multinational corporations here that are selling as a group, large cap growth, selling at a group at about 25% discount to its traditional p/e ratio, i say one of the first thing an investor
can do to improve their portfolio without put mortgage money in stocks is to move some money over, if they made money in small caps, if they made money in mid caps, move it over to large cap growth. that's what i would do on the stock side. and on the bond side, i would shorten up my duration, which is the amount of hurt you're going to get if interest rates go up. the ag is somewhere in the 5s. i go towards 5 and maybe to a 4.5 to 5% duration on my bond portfolio right now so that a rise in interest rates can't hurt my bond portfolio. very good. joe lavorgna, nathan bachrach, good to see you both. thanks for joining us. >> thank you, bill. >> you bet. >> now back to maria for the rest of the program. >> thank you so much, bill. up next, we're "on the money." can america be energy independent any time soon? and where are gas prices headed from here? my conversation with the ceo of one of the largest oil companies in the world is next. later, how health care of the future could lead you back to a better relationship with your doctor. harnessing technology for cheaper and more affordable medical care. as we take a break, take a look
john watson is chairman and ceo of chevron, one of the world's largest energy companies. it's a company with billions of dollars on the balance sheet, and big ambitions. i spoke to him recently about energy independence, america's natural gas bounty, and investing in the country's future. >> we're investing this year some $37 billion as a part of that growth strategy, which will deliver $3.3 million barrels a day, up about 25% from today out in 2017. >> so where will you invest particularly? what are the priorities in terms of oil and gas production? >> about 25% of our spending is in the united states. the opportunities that have been made available to us over the
years have been around the world. so we have big investments in australia. we have two local financial gas projects where us and our competitors are investing some $80 billion. and we expect that those projects will come online in -- late 2014 and 2016. and we have deep water developments in the gulf of mexico. several big projects which will add to production in this country. >> let me ask you about the gulf of mexico. i know that after the bp spill, the permitting was very much slow and, you know, not happening. are you getting the access to the product at this point in the gulf of mexico? are things back to normal? >> well, we've been able to get the permits that we need, but we need to allocate a lot more time for it there have been new standards that have been put in place, new regulation, many which we support and work our way through with the regulators. it's been harder for small companies. the bigger issue for us is access to acreage. 85% of our continental shelf around this country is offlimits to development.
if we want to grow oil and gas production in this country we have to make the acreage available both onshore and offshore. >> and of course there is this debate in terms of what the impact. let me ask you about that, because hydraulic fracturing, or fracking the biggest story in american energy right now. but there is pressure from environmentalists, pressure in people who say look, this is not going to be done safely. it will impact our environment. it will impact our wildlife. first, it be done, and can bit done safely? and how important st. it to chevron? >> the reality, maria, we've been doing fracking for decades in this country. violently not new technology. it's being deployed in a new manner, but we've fracked over a million wells in this country. so it's not new technology. natural gas that comes from shale that is derived from hydraulic fracturing now making up over 30% of our natural gas. it isn't an issue. now there are environmental practices that need to be followed, whether it's the
casing designs that are put in place, making sure we minimize the footprint around some of our facilities. and the industry is taking actions to address those concerns. but fundamentally, it's safe. it's been in use for a long time, and it's a windfall for this country. >> i guess the white house recently came out with an environmental report as it relates to the keystone pipeline. they said that in fact it's not going impact the environment negatively. what was your thought than report? >> no surprise. we have 2.5 million miles of pipelines in this country. we know that moving oil and gas by pipeline is safe. again, we have to have the right safeguards in place. but the industry has only improved its standards over time and has performed better and better. >> and this is an opportunity to create millions of jobs. isn't that right? >> well, it is. in fact, some estimates would say that there is a million jobs over the next 20 years that can be created in this country. and literally, trillions of dollars in tax revenue that is available. all we have to do is make
acreage available. make sure we keep reasonable fiscal terms in place and issue permits on a timely basis. >> everything you mention makes a lot of sense in terms of job creation, in terms the u.s. has to be an energy exporter. first of all do, you think that is a reality? >> first of all, we have an exporter of some products. natural gas has a great opportunity going for export going forward. as for oil, in general, we're still consume mortgage than we're able to produce. but we can reduce the amount that we'll be importing. and on a net energy basis, we have the opportunity to be a net exporter over the next 20 years. >> and in terms of the gridlock in washington, how is that impacting? >> well, our industry is a worldwide industry, so we continue to invest. but the uncertainty that we're seeing in washington does give many people pause. and it slows economic development. and that's not good for my business, but it's not goes for others as well. >> let me ask you about your allocation. that big cash load on your balance sheet, $22 billion in
cash. in such a low interest rate environment, what do you plan for that money? will you be increasing the dividend? >> well, our priorities are to increase the dividend as a pattern of future earnings and cash flow permit. we've increased the dividend 25 years in a row, and we certainly have the potential to do the same thing. we do keep a little bit of extra cash on our balance sheet so we can withstand the ups and downs of the commodity markets. >> what would your expectation be for oil and gas prices. obviously they go up and down and you're not going to predict. but based on the demand story out there and the supply of oil and gas right now are, oil prices priced right? >> well, oil is truly a worldwide commodity. and i would say the market is fairly well balanced today. now, we've seen upsets politically that can influence supply. but fundamentally, the market is well supplied to meet the needs. natural gas in this country is a little bit different. because of the shale gas that we're able to produce and other unconventional gases we actually have a relative surplus of natural gas. and those import terminals on the west coast are being turned around for export.
meanwhile, consumers are benefitting with very low prices. so whether you're an industrial customer or a customer for natural gas in the northeast, you're benefitting from that. >> my thanks to john watson. up next, we're "on the money" with a look at one startup providing health care benefits to employees of other fast-growing startups. i'll talk to a doctor who prescribes smarter technology for better patient care. and look at
the old model, you made an appointment and you hoped to get in a timely fashion. most of our patients reach out to us via e-mail. when you get tested, this is what you see. a sherpaa is a guide, someone who will take you on a journey in a safe way. medicine needs an infusion of something new to make the process of being sick a little easier. it empowers people. and the broader picture of what we're facing in this country, obesity and diabetes and heart disease. if you make patients advocates for their health sooner, younger, maybe we change the whole picture. >> in an era long removed from house calls, tapping into smarter technology may just be what the doctor ordered. health care is ripe for innovation in startup nation, new york company sherpaa guides growing companies towards more efficient, less expensive health care. that keeps employees healthier.
dr. jay parkinson is the founder of the company. jay, it's good to have you on the program. >> thank you. >> so health insurance the second biggest expense for companies, we know that, after payroll. tell me hoe your company sherpaa aims to address that. >> oftentimes companies insure their employs. >> you have a relationship. tell me how the system works. >> whenever a company signs up for sherpaa, we send each employee an e-mail saying welcome to sherpaa. they sign up. and they get access 24/7 to one of our doctors. 10 whenever they're in a bind, they're sick, they're hurt, they shoot us an e-mail or give us a call, and we'll either try to solve the problem right then and there, or we'll fast track them to exactly who they need. >> whereas in today's world, obviously, it's very difficult. something happens, it's very difficult to get to your doctor in an emergency. you may not see the doctor that is the one that you wanted because they may not be on call that weekend. >> sure. we got an e-mail from a patient
who is describing classic appendicitis. so we forwarded this e-mail on to our surgeon, dr. goldstein. dr. goldstein said send them right over. we sent the gentleman over. he was examined, found to have appendicitis. they set him up in a room. within six hours, he contacted us and was home, minus an appendix. and it cost about $60,000 less than going to the hospital. >> and how it is possible that it's $60,000 less? how are you able to offer these lower prices than the entire health care system which is so expensive? >> you have to think of a hospital, it's sort of like a factory that can build anything. and we like to direct patients to factories that can build just one thing. >> so tell me about your career. earlier in your career you worked as a primary care doctor who used google and texting to talk to patients. that was obviously very smart. how can you leverage consumer adoption of technology to make that patient seeking care experience more pleasant. >> well, it's just so old school. that's the thing.
it's just e-mail and phone. the real innovation is within a minute, you can get a response from one of our new york city-based doctors. >> and why wouldn't hospitals being do this, do you think? and doctors today. is it just too much, too many patients to actually have that personal direct one-on-one? >> doctors only get paid for office visits and procedures. so they're not paid for communication. if they were paid for communication, we'd communicate in whatever way we found best. >> interesting. very good point. you have spent some of your own money starting this company. how was the capital funding landscape, and what has it been like for you? >> well, for the past five years, i've sort of been the -- i don't know. people call me the doctor of the future. so i've been really connected to the vc world. so honestly, it was relatively easy for us because most vcs who don't invest in health care want to invest in health care, because it's something cool,
something new, something meaningful. >> and do you see more of this on the horizon? is this space ripe for more funding? >> the challenge is sometimes technology is built that doesn't fit into the economic models of health care. and it's more of a political problem rather than a technological problem. >> why? >> well, for example, whenever, you know, the feds are saying we'll only pay doctors for office visits and procedures, whenever you build companies based on messaging to doctors, it's just never going to work unless you create a new business model around it. and that's what we've done. >> and what your business model? how do you make money on this? >> well, we contract with companies. so, you know, it's very easy. we charge about $50 a month per employee. and those employees get unlimited access. and typically what happens is whenever we do this type of strategy with the economy, we save about $1,000 to $4,000 per year per employee that. >> is terrific. dr. jay parkinson, good to have
you on the program. >> thank you. >> we'll be watching the success. great story. dr. jay parkinson, sherpaa. up next, we'll take a look at the news this upcoming week. and the world hamburger chain expanding its menu. you'll never guess which vegetable is making its debut, and it's no april fools. stay with us.
otm.cnbc.com. i hope you'll follow me on twitter and on google, plus look for @mariabartiromo. here is a look at the stories coming up in the week ahead that may move the markets and impact your money this week. on monday the institute for supply management will release the monthly manufacturing index. on tuesday we'll get total auto sales for the month of march. and then on friday, the big kahuna of the economic reports, we'll get the unemployment rate and the number of jobs lost or gained in the month of march from the labor department reports, that monthly jobs report. finally today, mcdonald's fight for market share. the fast food chain continues to roll out new dishes to attract health-conscious diners. as of monday, mcdonald's will offer the chicken mcwrap. it is similar to snack wraps, but this sandwich will come with cucumbers, yes, cucumbers. the fast food chain says this will mark the first time the vegetable will be part of its core menu. the company hopes chicken and cucumbers is a recipe for success that will do it for us today. thank you so much for joining me. my guest next week a.g. lafley,
former chairman and ceo of procter & gamble. each week keep it right here where we are "on the money." have a great week, everybody. have a great week, everybody. i'll see you again next weekend. [ male announcer ] with citibank it's easy for jay to deposit checks from anywhere. [ wind howling ] easier than actually going to the bank. mobile check deposit. easier banking. standard at citibank.
welcome to "access hollywood". weekend edition. i'm shawn robinson. all of that coming up but he begin with battery he's against beach. bad press is following justin even to his front door. and in an exclusive interview on "access hollywood live"his mom patty tells us that 19-year-old son is his own man. >> son is in the news. justin bieber. >> i know it. >> the neighbor has made allegations against mr. bieber that unwanted touching. it could be patting on the back and alleges of threat. >> stichlts learn things on the internet the same as everybody else. and that was the story. >> justin mother patty at her own house not justin when the incident occurred tuesday morning in the neighborhood that's when one of the neighbor alleged bieber made physical contact and threatened him during altercation.
>> media unfairly going after the guy. >> i think him being 19, you know, i just got to let go a little and make his own decisions a little and you know i'm sure you can appreciate how as a mom how i feel in when i read some of these stories. i come at from it a totally different angle. >>reporter: story according to report that justin had ferrari delivered to home and racing vebingt up and down the street. neighbor was upset about the noise and danger to the community when he confronted justin. argument escalated to the point of alleged physical comment. he has no comment and no arrest charges or injuries stemming from the incident. >> have you seen a shift in him at all. >>. >>reporter: other than the bicep and abdominal. >> he's growing up. he's 19. he's not my baby. i, i want to be able to take away free will sometimes and be able to do everythi